Understanding the process of developing a equity financing strategy can allow an entrepreneur to anticipate the information, questions, and steps investors will undertake as they determine the company’s fit as an attractive investment target.
An equity financing strategy is very much like any sales process, with buyers and sellers trading information back and forth in order to determine whether a purchase makes sense. How the entrepreneur prepares himself and his company will increase the odds of a successful outcome.
Investors will lead and often direct the investment process because they will ultimately provide the money the entrepreneur is seeking. But entrepreneurs have a power position too. They are selling an equity stake in their enterprise, which could represent a high return. If the company is attractive product-wise, well managed, and it comes with high growth prospects – its capital-acquiring chances are equally high, making it a “hot” prospect with investors.
During the process do your due diligence on investors as well – and at the same time, fine tune the terms with which you feel comfortable. The investor will be working with equal vigor on his side.
Since a successful investment match will ultimately result in a partnership, both parties must be happy with the eventual union. Knowing what can be expected along the way in achieving the best “deal” will forearm you and lessen the fear of the unknown.
This e-book contains key information on developing your company’s equity financing strategy. After reading the 37 page e-book, you will be able to –
- Understand the risk factors in obtaining capital from outside the company, and related control issues
- Determine the significance of timing for your company’s investment strategy
- Recognize the external environment and sources for obtaining capital and their relevance to your company’s growth stages
- Determine your company’s value proposition
- Research various Venture Capital firms and Angels and know on a preliminary basis how to negotiate with them